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Filing for bankruptcy is one step you can take to regain control of your financial situation. While the legal process is in effect, creditors can’t attempt to collect debts, and you won’t get harassing letters and threatening phone calls from collection agencies. The agreement can also dissolve some of your debts and give you more time to pay off others. To determine what financial solution is best for your particular situation, here is a concise guide to the differences between Chapter 7 and 13 bankruptcies.  

Chapter 7

Income is the deciding factor regarding whether you can file for Chapter 7 or 13 bankruptcy. People with lower earnings might not be able to pay for living expenses and have money left over to repay debts, which makes them eligible to file for Chapter 7. This dissolves some debts, such as credit card balances and medical bills. A trustee is also assigned to ensure all debts that can’t be eliminated are repaid. This can include making sure cars and homes are returned to creditors. Some creditors might object to having your debts to them discharged, in which case they must provide evidence, such as previous bad behavior, to dismiss your claim.     

Chapter 13

Bangor-Sparta-Wisconsin-bankruptcyThe more money you make, the greater the likelihood that you will be able to pay down debts during a specific time frame. That’s why Chapter 13 bankruptcy is in place for individuals with higher incomes. Under the terms, they can keep all of their property, while paying creditors the value of possessions outside of Chapter 13 protection. Keeping up to date with court-ordered payment plans helps avoid costly penalties such as house and car repossession. In some instances, such as repayment of back alimony and child support, the balance is still owed if the entire debt hasn’t been repaid by the time bankruptcy has concluded. 

 

To discover whether you are eligible for Chapter 7 or 13 bankruptcy, contact the attorneys at Arndt Buswell & Thorn S.C. Serving clients in Monroe and La Crosse counties in Wisconsin for over two decades, they will provide legal assistance to protect your rights, navigate the complexities of the process, and create a recovery plan. They will also assist with estate planning and serve as your advocates during real estate, family, and business law proceedings. To schedule a consultation at the Sparta office, call (608) 269-1200, or reach the Bangor location at (608) 486-2324. Visit the full-service law firm online to learn more about their practice areas.

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